Transportation, Associations

Departments - Newsworthy

Recycling industry seeks relief from excessive rail charges

Members of the Institute of Scrap Recycling Industries (ISRI), Washington, have testified before a U.S. Surface Transportation Board (STB) hearing that rail is a critical mode for transporting ferrous and nonferrous scrap metal, particularly for distances greater than 200 miles. Because many recycling facilities are served by only one major freight railroad, few options are available. According to a news release from ISRI, this means recycling companies often face poor rail service and skyrocketing transportation fees.

ISRI called on the STB to address unreasonable railroad practices related to rail car supply and storage fees.

“It’s time for the STB to evaluate the commercial fairness of railroad demurrage tariffs and practices, which in many cases are the result of delays across the broader rail network,” says ISRI President Robin Wiener.

The system also includes unreasonable rail practices, the association says, such as reductions in available time for rail car loading, unloading and storage; service inconsistencies that precipitate demurrage and storage charges and impact facility operations (e.g., bunched cars or missed switches); the introduction of “not prepared for service” charges; and congestion charges.

According to ISRI, the association found additional examples of unfair rail practices experienced by its members. One member reported an increase in demurrage and storage charges of 669 percent in the first two months of 2019 compared with the 2018 average. Another member paid 1,000 percent more in demurrage and storage charges per month so far in 2019 compared with 2017.

To mitigate the expense, scrap facilities must employ a second crew or require employees to work overtime, driving up operating costs.

ISRI says it is asking the STB to apply the following principles in its evaluation of reasonableness of railroad demurrage practices:

demurrage practices must serve their underlying purpose of incentivizing an efficient rail network and must not be designed to generate additional revenue for the railroads;

railroad customers should not be penalized for railroad service failures; and

railroad customers should be given sufficient notice to allow for adjustment of their operations.

ISRI says it also supports the STB’s collection and analysis of rail data on demurrage and accessorial charges to help ensure these fees incentivize rail network efficiencies.

Michigan unveils statewide recycling education campaign

EGLE’s goal is to promote awareness of better recycling practices and to reduce the amount of contaminated materials being placed into recycling bins. The state also wants to double Michigan’s recycling rate to 30 percent by 2025 and ultimately reach 45 percent annually. Michigan’s current 15 percent recycling rate is the lowest in the Great Lakes region and ranks among the nation’s lowest, EGLE says.

“We want to inform and inspire more people than ever before in Michigan about how to recycle better,” says EGLE Materials Management Division Director Jack Schinderle. “This campaign is a first of its kind for Michigan that offers multiple benefits. Increasing recycling and improving the quality of materials we’re recycling saves energy, reduces water use, decreases greenhouse gases, conserves resources and translates into local jobs.”

State legislators have increased EGLE’s recycling funding from $2 million last year to $15 million in 2019, according to a news release from EGLE. The extra funds will support recycling markets development, increase access to recycling opportunities and reinforce planning efforts to grow recycling at the local level.

To kick off the campaign, EGLE introduced the Michigan Recycling Raccoon Squad, a six-member team of recycling champions who serve as EGLE’s education ambassadors.

EGLE research shows that education is key for residents to learn how to properly recycle. Fifty percent of Michigan residents mistakenly believe they’re allowed to recycle plastic bags curbside, which is prohibited by most municipalities. Seventy-six percent of Michigan residents are unaware that failing to rinse and dry items before putting them in the recycling bin poses a risk of contaminating everything in the bin.

Equipment Report

Departments - Equipment Report

Sennebogen invests in new service center

Sennebogen, based in Straubing, Germany, has announced it is building a new customer service center in Bavaria, Germany.

The $28 million center, set to be completed by the end of 2020, will feature two office buildings, service halls and a spare parts warehouse built on nearly 940,000 square feet of land, the company says.

The spare parts warehouse will have space to store 5,300 pallets and 37,400 small parts containers, Sennebogen says, and will feature technology designed to optimize logistics.

Sennebogen says spare parts sales, customer service and rentals from Sennebogen Vertriebs GmbH & Co. KG will be offered at the new service center. Its location at the intersection of two major highways also provides ease of accessibility for rented and used machines.

The new space will free up areas in Sennebogen’s other nearby locations, the company says, and will be used to expand production.

Sennebogen says building the center will generate about 50 new jobs in the region. About 100 employees will move from Sennebogen’s nearby locations to staff the new one.

LBX opens Customer Experience Center

LBX Co. LLC, Lexington, Kentucky, hosted a grand opening for its new Customer Experience Center June 13. The facility is on 25 acres in Citation Business Park on Remington Way in Lexington. Company officials say the operation accommodates customer experience programs, including dealer training and product demonstrations, in addition to community events.

“Today marks the culmination of a vision that started several years ago,” says Eric Sauvage, president and CEO of LBX, “a vision to better support our dealers, our customers, our employees and our community with our state-of-the-art 23,000-square-foot LBX Customer Experience Center. We are all very excited and already have a full calendar for the 2019 usage of our new facility with product and service training, customer demonstration days, clinic tests and philanthropy events.”

Lexington Mayor Linda Gorton, State Sen. Ralph Alvarado, State Rep. George Brown Jr. and area business leaders attended the grand opening, LBX says. Bob Quick, president and CEO of Commerce Lexington, emceed the event.

ZWS opens new recycling facility

Zero Waste Solutions LLC (ZWS), Rochester, Massachusetts, has opened a 103,000-square-foot recycling facility that will accept residential and commercial waste streams as well as single-stream and source-separated recyclables.

ZWS says it worked with San Diego-based CP Group to equip the facility with the latest sorting technologies to recover recyclables, allowing the facility to produce sought-after commodities.

“We are very pleased to announce that after a very long process, our Zero Waste Solutions recycling plant is now opened and processing materials into salable commodities,” ZWS President and CEO Michael Camara says.

The new ZWS recycling facility has been equipped with a variety of new recovery technologies, including screening systems, magnets, eddy currents to target aluminum and optical sorting systems, that are designed to automatically separate incoming recyclables into a variety of commodity categories.

“Combining the capabilities of our network of transfer stations and vast hauling operations as well as ZWS’ advanced recycling technologies, we will be able to develop extremely efficient recycling operations,” Camara says. “These advanced recycling technologies will allow us to improve our ability to process a larger percentage of materials, which can then be recycled, reused and diverted from disposal. We have installed the most technologically advanced separation equipment available to achieve the highest recycling rates.

“We are very proud opening one of the most technically advanced recycling facilities in the world and a great asset for Massachusetts,” Camara concludes.

Sweed Turbo Mill recovers copper from low-yield wire

Sweed, Gold Hill, Oregon, has released the Turbo Mill to help nonferrous scrap processors separate copper wire from the plastic surrounding it.

According to a news release from Sweed, the company noticed an increasing number of inquiries about low-yield copper wire. Sweed says it decided to design and manufacture a machine that could address the gap its customers were experiencing. The new design, which is sturdier, allows operators to further adjust the process.

The Turbo Mill beats the material around, tumbling it over to pulverize any remaining insulation, Sweed reports. The friction rips the plastic away from the copper wire, which is turned into tiny pellet-like pieces. In this shape, the balled copper flows freely like fine sand, allowing it to separate easily from the plastic; straight fine wire will nest and entrap plastic, making it difficult to separate effectively.

“Our Turbo Mill effectively and efficiently processes No. 2 copper wire and other fine wire, making it easier to separate,” says Chris Salyer, engineering director at Sweed. “Before it hit the market, the primary source for customers in the United States for a turbo mill was through international manufacturers.”

The recovered copper also has increased purity because the process that removes it from the plastic ensures that the two materials are completely separated.

“It increases your processing capability,” Salyer says of the machine. “Without a Turbo Mill, in our entry-level chopping line, someone might use an eighth-inch screen, which allows for 1,500 to 2,000 pounds of processing per hour. With a Turbo Mill, you can use a larger 3/16-inch or ¼-inch screen, which more than doubles your throughput and lets you process 4,000 to 5,000 pounds of material every hour.”

The line ranges from 40 horsepower to 150 horsepower and can integrate into any existing system, Sweed says.

Continental renames urban waste transport tires

Continental, a South Carolina-based automotive supplier and tire manufacturer, has renamed its commercial waste transport tires and retreads to provide clarity. The new nomenclature is descriptive and easy to use, ensuring tire dealers and fleets can pinpoint a tire’s application and usage at a glance, the company says in a news release.

The new name spells out the vehicle classification, axle configuration and application for which the tire was designed. For instance, the Conti HAU 3 WT is a heavy truck tire designed for all-position use in urban applications for waste transport. It is available as a new tire in 315/80R22.5 load range and as a retread in 210-to-280-millimeter widths.

The four-rib tread pattern with zigzag grooves resists high scrub, and the extra sidewall protection delivers resistance to curbs and cuts, Continental says. Its tread compound provides mileage and heat reduction, while the bead design offers durability and resistance to brake heat. The tire was available under the new name in May.

The ContiTread HDU 3 WT is a heavy truck pattern designed for drive axle use in urban applications for waste transport. It is available as a retread in 210-to-280-millimeter widths. The variety of widths ensures the retread can accurately fit all major casing sizes available on the market.

The 32/32-inch tread depth and open-shoulder tread design offer traction, while notches prevent heat buildup, Continental says. It is anticipated to be available under the new name starting in August.

The balancing act

Features - Municipal Contracting

MRF operators and municipalities must strike a balance between risks and rewards in recycling contracts.

Following China’s National Sword, a policy that began in January 2018 and effectively banned the country from importing certain recyclables, material recovery facilities (MRFs) in North America have struggled to market some of the recyclables they recover and have seen prices decrease for a number of secondary commodities.

Because of this and other market factors that are beyond their control, during contract negotiations, MRF operators and municipalities must engage in a balancing act when it comes to distributing the risks and rewards associated with fluctuating commodity markets.

“Back in 1995, when I was at BFI (Browning Ferris Industries), we felt that there might be a contractual pricing method that might sustain recycling for the long term,” said Michael Timpane, vice president of process optimization and recovery at Resource Recycling Systems (RRS), Ann Arbor, Michigan. “What was rolled out nationwide to 100 MRFs … [did not cause] a lot of disputes in contracts. That’s because we took the risk out of people’s cost structure. People got paid to their cost level at least before they started risking on commodity revenue.”

Timpane spoke during a webinar April 5, hosted by the Northeast Recycling Council (NERC), Brattleboro, Vermont. He introduced the cafeteria approach, where a MRF operator puts a price on every commodity that the MRF can recover. “Then, as municipalities, you decide what you want in your stream and whether or not it is good public policy to take more.”

Lori Scozzafava, recycling division chief for Maryland Environmental Service (MES), Millersville, Maryland, said she believed sustainable community recycling programs are achieved by asking communities to cover the base cost of processing recyclables rather than relying solely on the revenue from the sale of recyclables.

“One of the things I’ve come to realize is that shifting the risk is very important, especially in this day and age,” Scozzafava said. “I think that initially when recycling started, it made sense to include the risk on the business side of things. But shifting the risk to the community is a better way for the government to create sustainable programs.”

Addressing market conditions

Since its implementation, China’s National Sword has worsened market conditions, but Timpane said markets have been trending downward for a number of years.

“We’ve had a down market since 2010. Besides one really brief flip up in 2012 and another one right before the [Chinese] ban, it has been a generally down market for seven or eight years,” Timpane said, referring to the array of commodities coming out of MRFs. “There are almost no new material recovery facilities being built in the United States—maybe one or two per year—even though there are tons more collection programs. There is not enough investment in the system.”

Commenting on how U.S. counties have been affected by the poor market conditions, Scozzafava said they “had to shoulder the revenue reduction when the markets dropped. Just as we’ve seen all over the country, there has been significant reductions for these counties in terms of their revenue. The good news is that they have secured the capabilities of having their recyclables processed regardless of what the markets are because they’ve budgeted the expense.”

Stimulating competition

Stimulating competition between bids is a way to address poor market conditions. When there is competition, MRF operators can use the cafeteria approach when presenting their bids, and municipalities can choose which bid best fits their needs.

During the procurement process, Shahrzad Habibi, research and policy director at In the Public Interest (ITPI), Oakland, California, said cities should use approaches like best-value contracting, where contractors’ bids are given points and evaluated based on how well they comply with specified criteria.

“In addition to awarding points based on price, you can also prioritize other important factors, such as demonstrating good performance, safety records, meeting set wage and benefit standards, meeting specified health and safety standards and more. Such stipulations allow cities to evaluate bids based on factors other than the lowest price and thereby select a high-road contractor that will provide quality service,” Habibi said.

Regarding competition through the lens of the cafeteria approach, Timpane said, “Right now, we just have a glob of stuff, and someone gives us the processing fee proposal, and we put it into place and tend to believe what they are saying.” By costing every commodity out, he said, “you will find with good competition that you might get a lot of different choices in front of you, then you can decide what is best through that cafeteria approach.”

Complaints and termination

Various responsibilities need to be considered when drafting a contract between a hauler or MRF operator and a municipality, such as which party is responsible for handling customer complaints and what happens when expectations set forth in the contract are not met.

Habibi said the responsibility usually falls on the contracted party to handle customer complaints. She explained that contracts should detail how complaints will be processed, tracked and resolved, with a short timeline provided for complaint resolution. “A clear and documented complaint process also gives the city data about potential contractor deficiencies, providing them with another way to monitor contract compliance,” she added.

The right to terminate a contract becomes relevant when a contractor is not meeting the expectations laid out in the contract and the city is seeking a way to remedy the situation. “When a contractor defaults on its responsibilities detailed in a contract, it is important that the city has remedies available, including the right to terminate a contract,” Habibi says. “This termination notice period should be short, so the city can transition to another contractor or in-house staff if a problem arises that cannot be remedied.”

Contracts also should specify that the contractor is liable for damages that occur prior to the contract’s termination and explain how the municipality will recoup those damages.

Force majeure events are circumstances where contractors are unable to perform their specified duties, but the lapse is excused. Examples include natural disasters, such as hurricanes, floods, earthquakes and weather disturbances.

"What I would state, at least initially, is to go into any contract with trying to get a win-win for both sides.” – Lori Scozzafava, Maryland Environmental Service

“These events should be uncontrollable and unavoidable circumstances,” Habibi said. “They should not include preventable circumstances, such as labor strikes, lockouts or vendor failure.

“A reasonable timeline and process should be specified for resuming services after a force majeure event, and the contract should detail fines for not resuming service within that time frame,” she said.

A contract should detail what constitutes as force majeure events for the contractor and the city.

Including disciplinary language

If the responsibilities laid out in the contract are not sufficiently met, fines and liquidated damages can provide vehicles for the municipality to discipline the contractor without defaulting on the contract.

Fines and liquidated damages, Habibi said, are facets of good management. “Fines and liquidated damages should be high enough to provide a strong disincentive for acts of noncompliance. Furthermore, to provide the contractor an incentive to quickly address more serious contract violations, fines and liquidated damages can accrue until the issue is resolved.”

Habibi was not the only speaker to voice her thoughts on using fines and liquidated damages as motivators within contracts. Based on her experience, Scozzafava said fines can be effective in certain situations.

“I had an example of a county who had a contract for the processing of its materials, but they had no fine capabilities,” she explained. “The only mechanism that they had to address a huge decline in the productivity and maintenance of the facility was to threaten to default.

“The county found itself in a very difficult situation because they did not want to go into default,” Scozzafava continued. “They didn’t want to take over the facility; they wanted the contractor to stay in business. What they really wanted was for those maintenance and production items to be addressed.”

Scozzafava added, “Having fines in the contract would have helped [the county] significantly.”

Leaving room for flexibility

Scozzafava closed her presentation by giving general contracting advice to the attendees. She explained that flexibility is key when it comes to contracts. “Definitely include that you’ll allow for changes through work orders, so you can change the materials, frequencies or even working hours. Sometimes contracts get so tight they eliminate flexibility, which you need to be very careful of.

“I would also caution to put the details of your contract in an addendum to your contract so that they can be changed on an annual basis along with your budgeting process,” she continued. “What I would state, at least initially, is to go into any contract with trying to get a win-win for both sides.”

The author is an intern with the Recycling Today Media Group. She is based in Cleveland.